At the beginning of March before New Zealand felt the full grip of Covid-19, Finance Minister Grant Roberson unveiled the wage subsidy scheme as an economic response to the virus. Video / Mark Mitchell
Working families and beneficiaries will get a bit more money in their back pocket as part of new Government spending in response to the coronavirus outbreak.
Workers will also have the costs of self-isolation covered if they have run out of sick leave and can't work from home.
The new spending is designed to keep people in work, or stay home if they are sick, and support households which could lose jobs or have hours cut in a sharp economic downturn.
It was also designed to stimulate the economy. Any extra money for beneficiaries flows straight back into the economy through supermarkets, petrol stations and other spending.
Finance Minister Grant Robertson todayannounced a permanent lift of $25 a week to all main benefits, beginning on April 1.
The Winter Energy Payment, which is available to pensioners and beneficiaries in the winter months, will be temporarily doubled to $41 a week for single people and $63 a week for couples.
And working families will no longer need 20 or 30 hours to get the $72 in-work tax credit. They will instead qualify if they work any number of hours - as long as no one in the family is on a benefit.
That change was in anticipation of workers having more uncertain hours as the downturn hits.
Robertson also announced that the Government would cover the costs of workers who had run out of sick leave but had to go into self-isolation and could not work at home. This was also available to contractors or sole traders, or people caring for dependents who were in self-isolation or had contracted Covid-19.
"Ensuring that working kiwis, including those working as contractors or casuals, are financially supported so that they can self-isolate and take sick leave, is tremendously important," said Council of Trade Unions President Richard Wagstaff.
Unions and beneficiary advocates described the $12.1 billion package as a good first step, and said they hoped for further support for workers and beneficiaries in the May Budget. In all, the benefit changes would cost $2.8b and the self-isolation support would cost another $126 million.
Auckland Action Against Poverty coordinator Ricardo Menendez March said the lift to core benefit levels was a modest one.
It amounted to a 13 per cent increase for a single person on a benefit. A Welfare Expert Advisory group last year recommended an immediate lift in core benefits by between 12 to 47 per cent.
It would come on top of an already-announced $17 increase next month, when benefits will be indexed to wage growth rather than inflation for the first time. Beneficiaries would also be able to earn slightly more from next month before their welfare payments were reduced.
Child Action Poverty Group economist Susan St John said she hoped the changes were a "prelude" to more permanent changes to the welfare system in the Budget.
"As an economist, I have to applaud it. These are the time for bold moves. But it is only part one of what the Government intends to do, and there is an opportunity here for transformative change."
St John said the Winter Energy Payment, which was not income-tested, should be changed to include an opt-in clause. That would allow any saved money to be spent in a more targeted way, she said. Just 2000 people had chosen to opt-out last winter.
The new welfare payments and Winter Energy Payment will update automatically. Employers will have to apply to the Ministry of Social Development to get payments for their workers' sick days.
